A year-to-date chart of St Barbara's shares clearly shows the cliff plunge that followed its announcement of the $A556 million acquisition of Allied Gold.
The disappointing post-transaction performances of Allied's Simberi mine in Papua New Guinea and Gold Ridge mine in the Solomon Islands have also taken their toll - with St Barbara's shares down 19% for 2012 as of last week.
Sensing an opportunity to buy based on this slide and St Barbara's operational management strengths, RBC has slapped an outperform rating on the company with a share price target of $2.30.
And it has flagged further upside.
"A number of operational improvements could be implemented over the next six to 12 months, then we believe the company's shares may trend toward our upside scenario of $2.75, which is an implied return of more than 65%," RBC said.
St Barbara is expected to announce its plans to overhaul the cost-plagued Pacific mines this week.
"While we believe there may yet be a few tough quarters ahead for the Pacific assets, we believe, in time, St Barbara should be able to turn these assets around," RBC said.